
In case you hadn’t heard, Facebook is providing a nice, easy way for you to “like” everything on the web, not just the stuff you come across in Facebook. When you see the little, familiar thumbs up icon on sites and click it, it posts a link from the post back to your Facebook profile so all your friends can see that you liked it.
You can also see the other people who “liked” it as well.
This morning it struck me: this could be the beginning of how Facebook reinvents advertising on the web. Facebook doesn’t want to just sell ads on Facebook – it wants to be the de facto ad provider for the entire web, making it billions of dollars and a serious competitor to Google.
Here’s how it could do just that.
The Short Version
Facebook creates an ad network similar to Google’s AdSense where anyone can make room for ads on their site for Facebook to populate. The owner of the site gets paid each time someone clicks one of the ads. Those ads are selected not just by the content of the site (ala Google), but also based on the profile information of the people who have “liked” that site, creating a much more relevant, targeted ad system.
Shortly, Facebook will have the capability to create an ad network based on the following:
Content
(site you’re on)
+ Demographic data
(age, gender, education, location, etc. from your FB profile)
+ Psychographic data
(your “liked” sites, your FB groups, FB Pages you’re a fan of, your friends, etc.)
= Holy Grail of marketing opportunities
For Example
Let’s say you run a, uh, yoga site. You install the “like” functionality and a snippet of code allowing Facebook to run ads on your site. Your readers start “liking” your stuff, sharing it with their friends on Facebook. Sweet! You’re getting free publicity for your site! Yay social media!
All the while, Facebook is doing some crazy algorithmic ninja stuff in the background, looking at the Facebook profiles of all the people who “liked” your site to determine patterns, trends and correlation.
Interesting. It finds that 68% of people who “liked” your yoga site also “liked” sites about rock climbing (or belong to rock climbing groups, are fans of rock climbing pages, have mentioned “rock climbing” in their status updates).
All this happens continuously and near-instantly. Presto! Facebook sticks an ad for rock climbing equipment on the side of your yoga site.
Google would never know that. They would have just had ads for yoga mats.
OK. Good start. With even that much, Facebook is already creating ads infinitely more targeted than Google. Now let’s start getting really crazy.

Location Aware
Facebook knows your current location. You gave it to them when you filled out your profile. Instead of showing you an ad for rock climbing equipment, maybe it shows ads for rock climbing gyms in your area.
Cha-ching. It’s just cornered a lucrative market Google is scrambling to get into.
Target the Individual
If I’m logged into Facebook – or even have the cookie they check for – ads could be generated based on my FB profile information. Every ad I’d see on nearly every site I’d visit would be tailored specifically to me. I’d never see another irrelevant ad.
That’s good for advertisers, Facebook and me.
Heck, want to get really Minority Reportish? Ads could be customized with educational information, (“Come back to BYU and get a Masters Degree”), my name (“David, picture yourself driving a BMW M6″) or even information about my family and friends (“Michael’s birthday is coming up…”).
And it does it without sharing your private data with third parties.
Customize More than the Ads – Customize the Web
Entire sites could be themed based on individual’s Facebook information. You recently became a fan of Avatar? When you visit Best Buy the entire site is skinned in an Avatar theme.
All Best Buy would have to do is pick the top ten movies (or video games, or music albums, etc.) and create themes for each of them. If a visitor to the site has “liked’ something having to do with Avatar elsewhere on the web, or is a fan of the movie’s Facebook page, Best Buy will present that theme based on the available data from Facebook.
Conclusion
Google presents ads based on what we’re looking at. It tries to gather as much information about you as possible to generate more targeted ads. It’s obviously a good model – they generate billions of dollars a year doing it.
Facebook already has all the information about you. They just need the content and distribution model.
Image courtesy of here.